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Make sure you get paid

You’ve grown a great crop and booked a good price. Now make sure you actually get paid

Before you shop a truckload of grain, it’s worth knowing a bit about who you’re selling to and what you’ve got in the bin. Doing your homework could make the difference between getting paid fairly and perhaps not getting paid at all.

Under the Canada Grain Act, grain dealers and elevators, including primary and terminal elevators and processors, need to renew their licences with the Canadian Grain Commission (CGC) each year.

Along with applying for licences and providing year-end financial statements, dealers and elevators have to tender security, says Fred Hodgkinson, head of licensing with the CGC. All licensees file a monthly liability report with the commission so they can be sure the companies are in compliance.

If farmers aren’t paid before a licensed company goes bankrupt, they can file a claim to be paid out of that tendered security, Hodgkinson explains.

“If you deal with a company that isn’t (licensed) don’t come a-callin’ if you can’t get paid because we haven’t got security. But phone in advance, confirm if the company’s licensed,” says Hodgkinson.

Licensed grain dealers and elevators are listed on the commission’s website, at www.grainscanada.gc.ca, under “licensed companies.” Companies also need to post current licences in their office or elevator, Hodgkinson says.

If farmers are unsure about whether a company is, or should be, licensed, they can also phone him, says Hodgkinson.

Farmers should make sure they get a delivery receipt on the day grain is unloaded, which includes specs from the unload, says Hodgkinson. Cash purchase tickets are also acceptable for filing a claim. Scale tickets are not.

And although farmers may want to amortize income for income tax purposes, “the sooner you get payment the better,” says Hodgkinson. Farmers are only eligible to claim their share of the tendered security for 90 days after delivery, Hodgkinson explains.

Once a settlement is issued, the farmer’s initial receipt is no longer eligible against security, says Hodgkinson. Farmers will only have 30 days to make a claim on the settlement document. Otherwise a company’s liabilities would climb, particularly in the fall, as it carried forward deferred producer payments.

“By cutting that window down to 30 days, then that eliminates that excessive carryover of possible deferred settlements,” says Hodgkinson.

If farmers sit on their initial receipt for 80 days before seeking a cash purchase ticket, that cash purchase ticket is only eligible for 11 days against security, Hodgkinson says, assuming it’s dated that day.

Farmers who accept post-dated cheques from licensed companies will only be covered for 30 days from the date the cheque is issued, no matter what the date is on the cheque, the commission’s website states.

Hodgkinson says he also gets questions about delivery contracts, particularly when farmers aren’t able to deliver on time because of weather or road bans. “We always stress that until the delivery is made, we have no ability to get involved in the scenario.”

Making the grade

Farmers who disagree with the grade a licensed primary elevator assigns can also appeal to the Canadian Grain Commission.

“However the Grain Commission grades that sample, that is binding. So the elevator must pay according to the CGC grade,” says Daryl Beswitherick, manager of quality assurance at the Commission. The Commission will also rule on dockage, moisture and protein.

Both the farmer and elevator staff must agree the sample is representative of the truck load in question. And farmers wanting to appeal to the commission should act as quickly as possible, he adds.

“We do get calls from producers who’ve waited too long. Then we can’t do anything about it. So it needs to be timely,” says Beswitherick.

More information on the Canadian Grain Commission programs is available at www.grainscanada.gc.ca.

About the author

Field Editor

Lisa Guenther

Lisa Guenther is field editor for Grainews based at Livelong, Sask. You can follow her on Twitter @LtoG.

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